Information Systems

in Business

Information Systems
Information System (IS): A Process that:

collects,
processes,
stores,
analyzes, and
disseminates

information for a specific purpose.

Components of an IS
1.

People Resources

- End Users - IS Specialists

2.

Hardware

- Machines - Media
3.

Software

- Programs - Procedures
4.

Data Resources

- Data and Knowledge Bases

5.

Network Resources

- Communications Media and Networks

Dimensions of Information Systems

Three Important Dimensions of Information Systems
Organizations
Management
Technology
You will need to understand and balance these
dimensions of information systems in order to create
business value.

The Organizational Dimension of Information Systems

People
Structure
Business processes
Culture
Politics

The Management Dimension of Information Systems

Simulating
Decision making
Planning
Innovating new processes
Setting agendas & Targets

The Technology Dimension of Information Systems

Information technology is one of the tools managers
use to cope with change:
Hardware: Physical equipment
Software: Detailed preprogrammed instructions
Storage: Physical media for storing data and the
software

The Technology Dimension of Information Systems

(Continued)
Communications technology: Transfers data
from one physical location to another
Networks: Links computers to share data or
resources

Managers need to know enough about information

technology to make intelligent decisions about how to
use it for creating business value.

Classification of Information Systems

The two most common classifications are:
Classification by breath of support
Classification by organizational level .

Departmental, corporate, and interorganizational IS

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Classification by Organization Levels

The typical enterprise is organized
hierarchically, from the:

clerical and office worker layer,

to the operational layer,
the managerial layer,
the knowledge worker layer and
finally the strategic layer.
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Types of Information Systems

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Three main categories of information systems serve
different organizational levels:

1. Operational-level systems: support operational

managers, keeping track of the elementary activities and
transactions

2. Management-level systems: serve the monitoring,

controlling, decision-making, and administrative activities

3. Strategic-level systems: help senior management

tackle and address strategic issues

MAJOR TYPES OF SYSTEMS IN

ORGANIZATIONS
Transaction Processing Systems (TPS)
Management Information Systems (MIS)
Decision-Support Systems (DSS)
Executive Support Systems (ESS)

Typical Applications of TPS

Management Information Systems (MIS)

Management level

Inputs: High volume transaction level data

Processing: Simple models

Outputs: Summary reports

Users: Middle managers

Example: Annual budgeting

Management Information Systems (MIS) (continued)

Management Information Systems (MIS) (continued)

A sample MIS report

Decision-Support Systems (DSS)

Management level

Inputs: Transaction level data

Processing: Interactive

Outputs: Decision analysis

Users: Professionals, staff

Example: Contract cost analysis

Decision-Support Systems (DSS) (Continued)

Voyage-estimating decision-support system

EXECUTIVE SUPPORT SYSTEMS (ESS):

Inputs: Aggregate data

Processing: Interactive

Outputs: Projections

Users: Senior managers

Example: 5 year operating plan

EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)

Top Level Management

Designed to the individual senior manager

Very expensive to keep up

Extensive support staff

The Four Major Types of Information Systems

Relationship of Systems to One Another

Interrelationships among systems

Traditional Silo View of Information Systems

Within the business:

There are functions, each having its uses of
information systems
Outside the organizations boundaries:
There are customers and vendors
Functions tend to work in isolation

Traditional View of Systems

Cross-Functional Business Processes:

Cut across boundaries between Sales, Marketing,
Manufacturing, and Human Resource, etc.
Group employees from different functional specialties
to a complete piece of work
Example: Order Fulfillment Process

The Order Fulfillment Process

Systems for Enterprise-Wide Process Integration

Enterprise applications:
Designed to support organization-wide process
coordination and integration

Enterprise Systems

Systems for Enterprise-Wide Process Integration

(Continued)
Consist of :

Enterprise Resource Planning (ERP)

Supply chain management systems
Customer relationship management systems
Knowledge management systems

Enterprise wide Systems

Enterprise resource planning (ERP) systems:
provide a single information system for
organization-wide coordination and integration of
key business processes.

Enterprise Application Architecture

Integrated Systems Approach

Common set of applications
Usually requires re-engineering of business
processes
Better alignment

Limited customization
Easier upgrades

Overcomes inefficiencies of independent

systems
Integrated data supports multiple business
functions

Benefits of Enterprise Systems

Help to unify the firms structure and organization:
One organization
Management: Firm wide knowledge-based
management processes
Technology: Unified platform
Business: More efficient operations & customerdriven business processes